Rich countries to compensate poor nations for climate change damage, 55 vulnerable nations estimated to lose $580 bln per year by 2030
Delegates at the COP27 climate summit in Egypt agreed after late-night talks to put the delicate issue of whether rich nations should compensate poor countries most vulnerable to climate change on the formal agenda for the first time.
For more than a decade, wealthy nations have rejected official discussions on what is referred to as loss and damage, or funds they provide to help poor countries cope with the consequences of global warming.
A flood victim pushes his donkey cart on flooded highway, following rains and floods during the monsoon season in Sehwan, Pakistan, September 16, 2022. REUTERS/Akhtar Soomro/File Photo
COP27 President Sameh Shoukry told the plenary that opens this year’s two-week United Nations conference attended by more than 190 countries the decision created “an institutionally stable space” for discussion of “the pressing issue of funding arrangements”.
At COP26 last year in Glasgow, high-income nations blocked a proposal for a loss and damage financing body, instead supporting a three-year dialogue for funding discussions.
The loss and damage discussions now on the COP27 agenda will not guarantee compensation or necessarily acknowledge liability, but are intended to lead to a conclusive decision “no later than 2024”, Shoukry said.
In U.N. climate talks, the phrase “Loss and Damage” refers to costs already being incurred from climate-fuelled weather extremes or impacts, like rising sea levels.
Climate funding so far has focused on cutting carbon dioxide emissions in an effort to curb climate change, while about a third of it has gone toward projects to help communities adapt to future impacts.
But there is no agreement yet over what should count as “loss and damage” in climate disasters – which can include damaged infrastructure and property, as well as harder-to-value natural ecosystems or cultural assets like burial grounds.
A June report by 55 vulnerable countries estimated their combined climate-linked losses over the last two decades totalled about $525 billion, or about 20% of their collective GDP. Some research suggests that by 2030 such losses could reach $580 billion per year.
Vulnerable countries and campaigners have argued that rich countries that caused the bulk of climate change with their historical emissions should now pay. The United States and European Union have resisted the argument, fearing spiralling liabilities.
The EU and United States blocked a proposal at last year’s U.N. climate talks to establish a fund, agreeing instead to a “dialogue” without a clear end goal. Over the last month, they have signaled more openness to discussing compensation at COP27, but remain wary of creating a fund.